Long Term Debt
Money that a company has borrowed for a period of time longer than a year. A company’s long-term debt has little relevance as a raw number, but when compared with shareholders’ equity, it’s a good measure of how leveraged the company is. An excessive amount of long-term debt is dangerous, because the interest on that debt must be paid no matter how well the business is doing. Also, rising longterm debt over time is a warning sign.
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